Study: Mortgage Deduction Gives Profits to Lenders

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This transcript has been automatically generated and may not be 100% accurate.

… I … you fall … you fall in all … the mortgage interest rate deduction … credit that you get right … to the deal for you … check out the portion called war Jack IUI to play with playdough I didn’t bring my only daughter I don’t like the direction the few stories going into the leader of the … Holy anyone talking though … it doesn’t work that were to changes to tax it does work is not good … as the next step was committed … well I’d I don’t think that’s the max I mean I don’t think there is … political will for that let’s look first at how well right and what happens … so there’s a new study out that was the subject of my column and the andthe sunny firms … that … B’Tselem between nineteen seventeen percent value of the subsidy flows to lenders instead of palm or … is it about the economics course rate that is that the soaps on something … it is of increasing demand and raising prices in the same or to be true of mortgages but to some removing parts of the firm’s or to tell what the impact this of this professor at Georgia State University … did something clever he looked the more it is that it will hang right around the million dollar mark that the cut off to the war was little in it it yet it to Florida than a million dollars you don’t get the mortgage interest deduction on the trot now so … by looking at loans around that women he was able to determine Mary kept all these other factors it was able to determine as the loans crossover that more … that the interest rates drop off … and then more of a long has over million dollar mark a low interest rate … is all else held equal in other words … blunders adjusts blunders adjust their prices in the words or interest rates … knowing that you’re giving them mortgages to seduction all really does it does remove a portion of it raises price … know what are the odds that you could fill that … that I mean what about the economics that are right when … you go to the American public and say look you’re not getting as good a deal with the mortgage deduction as you think you are … but to renovate your your brakes are actually going to lower the people you find people were getting adopted auction and using a lot are still getting a better deal … the mortgage rates on Friday were three point six seven on thirty year so we’re talking about … so far without the mortgage deduction this professor figures that brace for the three point three percent right now so they’d be below that are still probably better off … if you have a big mortgage we’re paying a lot of interesting or a higher tax bracket … you know some of what the well-known criticism of the mortgage deduction for small it benefits the high income and said just proportion right because they make most their and a higher tax brackets … also benefits people larger houses well or they get the house for money in a bigger deduction it’s an incentive to to borrow to buy a house husband and the euro and your refinance and so what … and also there is research out there says it doesn’t really increase home ownership rate in most countries are pure nations the US don’t have this mortgages Dutchman many of them have homeownership Steve are higher than the rain us all … the top either there is a lot of criticism out there of course … you know what people say right now than the real state market top if you get away … the political ad prices are down thirty am Wyse’s are being sought to get away with its mortgage production all the sudden … you expect prices to decline further … that’s probably so I think this research shows that … maybe not as much to think because there would be some offset in terms of lower mortgage rates go … but you know we’re talking about a lot of money in this deduction … it is if it is a transfer of wealth from people who don’t have mortgages to people who built them and is projected to cost more than six hundred billion dollars over the next five years … that’s about five thousand dollars hotel sold … so it’s a lot of money and in some sense it’s flowing from lower income people hiring people have these mortgages does this argument … and did … you mean it did apply in general to the tax code has a lot of insane use the tax code … there’s less to do something that don’t necessarily do I mean are you know what you are forming attached to it … can you start making these kinds of artists for more than just the morning … I’ve argued for years we will have a tax code in America we have … a spending rate because … you can take the guesswork taxes may have a few different brackets for for your tax on income is pretty simple stock complicated role you compare the paper to the problem is … the hundred sixty five different spending programs layered on top of it … and this is what you know you could turn this into a … into a flat out spending program but is taxing people and cutting checks anyone who owns a mortgage each year it will be the same effect is having this mortgage … interest deduction because what’s to lose this tax revenue … it enough to make up for by either raising taxes in other places or … ABA that the so McGovern accounts for this feature it does go on a Ledger in terms of spending but they account for it … Zeppelin they call it … a tax expenditure it is I make … it out it’s how the whole prom with the tax code if we really had a tax code of the people complain about a promise wheel that we were spending Co disguises attack right right I mean things are handed out early … in the … bomb bonds and about these little gifts defenders their public thinking they’re a lot worse than a mortgage interest in the ETF the point


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